Digital boards are like the steering wheel of their company, leading the business toward the uncharted water and blurred territories for reaching the well-selected destination. They must have a resilient mindset for adapting to the continuous digital disruptions, set the tones for change and proactively drive digital transformation with the step-wise approach and accelerated speed.
Resilience is the ability to respond to change and to recover quickly from setbacks: Board directors as top directorship roles are supposed to be the guiding force in the enterprise, they are able to sense that the digital transformation is multifaceted and highly volatile, help the top management identify blind spots, clarify priorities, and avoid pitfalls on the way. The corporate board with strategic resilience can sense failures, overcome challenges, and setbacks with a positive attitude and be able to keep working and focusing, even during stress and disturbance, rather than reacting to stressful situations, in order to steer the business in the direction with calm and confidence.
Business resilience is the capacity to respond to the unexpected in a way that increases gain and/or minimizes loss. The corporate board plays a crucial role in diagnosing the overall health of the business and improving business resilience by asking the management tough questions such as: What are the contributing environmental factors and behaviors? What are the needed changes in behavior, process, communication, accessibility, engagement, or practice? Which processes need to be improved or transformed? What capacity for marketing, sales, manufacturing, and management, will you need? etc. At a higher level of maturity, resilience makes the business robust and antifragile.
It’s important to oversee risks, but also identify some opportunities as well: Every opportunity has the risk in it, and every risk could also have the opportunity in it. The corporate board oversees risk/governance. With the increasing speed of changes and digital velocity, the corporate board has the responsibility for governing risks, more specifically setting the risk appetite and risk framework for an enterprise on the advice of management.
With today’s digital dynamic, uncertainty is only certain, actually the best opportunity in businesses or any field. BoDs do not manage risks but oversee risk and ensure that management has put in place an effective risk-management process, and the directors assess whether risks are undertaken and managed consistently with the established risk appetite by asking tough questions: How robust was the organization's risk assurance system, all the way up to the management board? How could that system miss something that has had a widespread impact? Corporate boards need to work closely with the senior management for mastering risk intelligence, identify both emerging business risks and opportunities and keep focusing on doing fundamental things right.
Great board leaders supply the framing context in understanding uncertainty and encouraging optimism: Now with the uncertainty around with increasing pace of changes, the volatile market situations, extreme competitions, emerging digital technology trends, modernization, etc, the problem is not uncertainty, rather, it is unpreparedness towards the efficient handling of uncertainty as so many factors need to be considered in order to understand and handle uncertainty. The best practice of the board to enforce governance discipline under uncertain circumstances is about advising the management on how to be well prepared for the challenging task of facing uncertainty while moving forward.
As uncertainties are a common occurrence in any walk of our progress. You cannot predict anything beforehand but can imagine with many experiences involved in current or in the past. It involves the translation of “how to deal with uncertainty” into “how to mitigate uncertainty or deduce the degree of uncertainty” via collecting information or gaining new knowledge. Top business leaders including the corporate board must become aware of its own resources, achieve behavioral strategies effectively and have a path of great preparation, vision, intuition, perseverance and the ability to work hard and smart to overcome the challenges.
The forward-looking view of the organization is to determine what the future needs to look like, what digitalization must look like, and how digital leaders can navigate the rocky road to business transformation, innovation, and globalization. Corporate boards with strategic resilience are able to see further and perceive better than others in order to drive the digital paradigm shift, set guidance about what core to preserve and what future to stimulate progress toward.
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